This case is before the Authority because of a negotiability appeal
filed under section 7105(a)(2)(D) and (E) of the Federal Service Labor -
Management Relations Statute (the Statute) and concerns the negotiability of
six provisions of a local agreement disapproved by the Agency head under
section 7114 (c) of the Statute.
1
We hold that Provision 6 and Provision 5 except for sections l.B., 5.B., 10,
12, and the first sentence of 5.A. are within the duty to bargain. We also find
Provisions 2, 3, 4, and Sections l.B., 5.B., 10, 12 and the first sentence of
5.A. of Provision 5 are outside the duty to bargain.

II. Provision 1

The Members have expressed different views concerning Provision 1. The
Decision and Order on Provision 1 and Chairman Calhoun's separate opinion
immediately follow the Decision and Order in this case.

III. Provision 2

The text of the provision is set forth in Appendix A to this decision.
Only the underlined portions of the provision are in dispute.

A. Positions of the Parties

Provision 2 concerns the composition of merit staffing panels which
advise selecting officials by rating and ranking candidates for selection for
promotion. The Agency contends that the provision interferes with its rights to
assign work and to determine the personnel by which its operations are to be
conducted under section 7106(a)(2)(B) of the Statute.

The Union maintains that the "opt out" clause in the second paragraph
prevents Provision 2 from infringing upon management's rights. In addition, the
Union asserts that the purpose of the provision is to ensure fair and objective
evaluations.

B. Analysis

It is clear that employees appointed to ranking panels are performing
work for the Agency and that their selection involves a work assignment by the
Agency to the selected individuals. The Authority has consistently held that
proposals which interfere with management's right to assign work are outside
the duty to bargain under section 7106(a)(2)(B) of the Statute and that the
right to assign work includes the discretion to determine "the particular
employees to whom or positions to which (work) will be assigned." National
Treasury Employees Union and Department of the Treasury, Bureau of the Public
Debt, 3 FLRA 769, 775 (1980), aff'd sub nom. National Treasury Employees Union
v. FLRA, 691 F.2d 553 (D.C. Cir. 1982).

In agreement with the Agency, we find that the disputed portions of the
provision would restrict management's ability to select individuals to serve on
ranking panels. The first paragraph of Provision 2 would require the Agency to
select individuals from all levels of the workforce, one personnel specialist,
and a subject matter expert. The second paragraph of the provision would, under
most circumstances, require the Agency to select panel members from
organizational segments other than those supervised by the selecting official.
The disputed language in the third paragraph prohibits the Agency from
selecting a Union officer or steward and an employee at a lower grade level
than the position to be filled as members of a ranking panel. In effect,
Provision 2 prevents management from assigning duties to particular employees.
Thus, Provision 2 would directly interfere with the Agency's right to assign
work under section 7106(a)(2)(B) of the Statute. See National Federation of
Federal Employees, Locals 1707, 1737 and 1708 and Headquarters, Louisiana Air
and Army National Guard, New Orleans, Louisiana, 9 FLRA 148 (1982) (proposal
designating particular management officials to rating and ranking panels
nonnegotiable); National Treasury Employees Union and Department of the
Treasury, 21 FLRA No. 123, slip op. at 7-8 (1986) (provision prohibiting
selecting official from serving on ranking panel nonnegotiable).

As to the Union's contention that Provision 2 contains an "opt out"
clause, thereby rendering it negotiable, we find this contention to be without
merit. The clause which the Union refers to applies only to the second
paragraph of the provision. Furthermore, it would permit the Agency to "opt
out" of its requirement that panel members not be from the same organizational
segment supervised by the selecting official only under the limited
circumstance that the requirement would preclude the Agency from including on
the panel a qualified subject matter expert. This clause is inadequate to
substantiate the Union's claim that management's rights would not be
substantively restricted by the provision.

C. Conclusion

Based on the reasons and cases cited in the foregoing analysis, we
conclude that Provision 2 is outside the duty to bargain under section
7106(a)(2)(B) of the Statute.

IV. Provision 3

Article 14, Section 2 A.:

The Service agrees that an employee who is detailed to a position of
higher grade for more than thirty (30) consecutive calendar days will be
temporarily promoted. To receive the higher rate of pay, however, the employee
must satisfy requirements of law and/or government-wide regulation. The Service
also agrees to refrain from rotating assignments of employees solely to avoid
compensation at the higher rate. (Only the underlined portion is in
dispute.)

A. Positions of the Parties

The Agency contends that Provision 3 interferes with its right to assign
employees, under section 7106(a)(2)(A) of the Statute. The Union contends that
the provision, because it contains the word "solely," would not prevent
management from rotating assignments. In its view, this provision is merely a
mechanism to enforce other provisions of the parties' agreement.

B. Analysis

In National Treasury Employees Union and Department of the Treasury, 21
FLRA No. 123 (1986) (Provision 8), the Authority found a provision
nonnegotiable which was identical to the language of the disputed portion of
the provision in this case. In Department of the Treasury, the union argued
that the provision did not violate management's right to assign work because
management would retain the discretion to detail employees for any reason other
than to avoid paying employees higher compensation. The Authority rejected the
union's argument holding that the provision substantively restricted
management's right to rotate employee assignments. Thus, based on Department of
the Treasury, Provision 3 is outside the duty to bargain under section
7106(a)(2)(A) of the Statute. See also National Treasury Employees Union and
Department of the Treasury, Internal Revenue Service, 14 FLRA 243, 247 (1984)
(Provision 2).

We note also that the Union argues that Provision 3 is merely a
mechanism to enforce other provisions of the parties' agreement. However, the
Union does not designate which parts of the agreement Provision 3 affects. If
the union is referring to the undisputed portion of Provision 3, it would be a
mechanism over which the Agency has no duty to bargain because of its
substantive interference with the Agency's right to assign employees.

C. Conclusion

For the reasons stated above, Provision 3 is outside the duty to bargain
because it interferes with management's right to assign employees under section
7106(a)(2)(A) of the Statute.

V. Provision 4

The text of the provision is set forth in Appendix A to this
decision.

A. Positions of the Parties

The Agency contends that this provision, which concerns aspects of its
performance appraisal system, violates management's rights to direct employees
and assign work under section 7106(a)(2)(A) and (B) of the Statute. In
response, the Union contends that the provision does not infringe upon
management's rights because it merely incorporates Office of Personnel
Management (OPM) regulations.

B. Analysis

Section 5 of Article 15 would establish five rating levels for the
appraisal of an employee's performance in each critical element and for
evaluating overall performance. Section 8E of Article 15 defines these levels.
The Authority has consistently held nonnegotiable proposals similar to
Provision 4 which also established the number of rating levels and criteria for
performance evaluation. Such proposals are outside the duty to bargain because
they directly interfere with management's rights to direct employees and assign
work under section 7106(a)(2)(A) and (B) of the Statute. American Federation of
State, County and Municipal Employees, AFL - CIO, Council 26 and U.S.
Department of Justice, 13 FLRA 578, 580-81 (1984). See also American Federation
of Government Employees, AFL - CIO, Local 1858 and U.S. Army Ordnance Missile
and Munitions Center and School (USAOMMCS), Redstone Arsenal, Alabama, 26 FLRA
No. 12, slip op. at 3-4 (1987) (Provision 2); National Federation of Federal
Employees, Local 29 and Department of the Army, Kansas City District, Corps of
Engineers, 14 FLRA 283, 287 (1984) (Proposal 3).

The Union argues that the provision does not infringe on management's
rights because it merely incorporates 5 C.F.R. 430.405(h), which requires that
each appraisal system shall provide for five summary rating levels. The Union's
contention cannot be sustained. In National Federation of Federal Employees,
Local 1167 and Department of the Air Force, Headquarters, 31st Combat Support
Group (TAC), Homestead Air Force Base, Florida, 6 FLRA 574, 577 (1981)
(Proposal 1), aff'd sub nom. NFFE, Local 1167 v. FLRA, 681 F.2d 886 (D.C. Cir.
1982), the union argued that a part of a proposal was negotiable because it
merely reiterated the restrictions contained in an Office of Management and
Budget (OMB) circular which prescribed general policies for contracting out.
The Authority stated that the incorporation of specific contractual terms would
have required management to comply with those terms regardless of whether OMB
subsequently revised or eliminated the directives from which they were taken.
Thus, the proposal would have imposed an independent contractual requirement
upon management's discretion with respect to contracting out and would have
interfered with management's rights under the Statute.

In this case, we find that even if the provision accurately reflects an
OPM regulation, it would require the Agency to comply with that regulation as a
matter of contract, regardless of whether OPM revised or eliminated the
regulation. The provision would impose an independent contractual requirement
on management's discretion to direct employees and assign work, and, therefore,
is inconsistent with section 7106(a)(2)(A) and (B) of the Statute. See also
National Treasury Employees Union and Department of Energy, 19 FLRA 224, 232
(1985) (Proposal 3).

C. Conclusion

For the reasons and cases cited in the foregoing analysis, Provision 4
directly interferes with management's right to direct employees and to assign
work, under section 7106(a)(2)(A) and (B) of the Statute. Accordingly, the
provision is outside the duty to bargain.

VI. Provision 5

The text of the provision is set forth in Appendix A to this decision.

A. Positions of the Parties

Provision 5 would include reduction-in-force (RIF) requirements, many of
which are based on Government-wide rules and regulations at 5 C.F.R. Part 351,
in the parties' negotiated agreement. In addition, it would provide that the
union receive certain information, such as the anticipated date of a RIF and
the reasons for it, if a RIF action were undertaken by the Agency. Some
sections, for example sections 4.D. and 9.A., would provide procedures that the
Agency would be obligated to follow in a RIF.

The Agency argues that the incorporation of Government-wide RIF
regulations into the contract is outside the duty to bargain. Relying on prior
Authority decisions, the Agency asserts that the incorporation of RIF
regulations would impose an independent contractual requirement on management
in violation of management's section 7106(a)(2)(B) rights. In addition, without
specifying the sections to which it is referring, the Agency contends
that Provision 5 is non-negotiable because it violates management's rights
under section 7106(a). In general, the Agency asserts that the provision would
violate management's rights to determine the number of its employees under
section 7106(a)(1); take personnel actions under section 7106(a)(2)(A);
determine the personnel by which its operations are to be conducted under
section 7106(a)(2)(B); and make selections under section 7106(a)(2)(C) of the
Statute. Finally, the Agency specifically argues that three sections of
Provision 5--application of RIF rules to reclassification following a change in
duties (Section l.B.), an employee's entitlement to additional service credit
(Section 5.A.), and the amount of additional credit based on performance
ratings (Section 5.B.)--conflict with RIF regulations.

The Union's sole argument is that Provision 5 is within the duty to
bargain because the Statute gives a labor organization the right to negotiate
over Government-wide rules and regulations if a proposal does not restrict
current regulations in any way. In support, the Union asserts that section
7116(a)(7) of the Statute allows parties to negotiate on existing regulations
and requires that an agency adhere to any resulting agreement even after
differing regulations are adopted. The Union also states that the Agency has
failed to demonstrate specifically how the provision violates management's
section 7106(a) rights.

B. Analysis

1. Provision in General Is Not Inconsistent with Management's Rights

Initially, we note that the parties bear the burden of creating a
factual record sufficient for the Authority to resolve the negotiability
dispute. National Federation of Federal Employees, Local 1167 v. FLRA, 681 F.2d
886, 891 (D.C. Cir. 1982). In this case, although the Agency alleges that its
rights under section 7106(a)(2) are violated by the provision, it fails to
indicate which sections directly interfere with management's rights and in what
manner.

A careful review of Provision 5 reveals that, except for those sections
determined to be inconsistent with the Statute or Government-wide regulations
for the reasons discussed in B.2. below, the provision merely recognizes an
external limitation set out in 5 C.F.R. Part 351 and imposes no substantive
limitation on management rights. Compare Defense Logistics Agency Council of
AFGE Locals, AFL - CIO and Department of Defense Logistics Agency, 24 FLRA No.
40, slip op. at 8 (1986) (Provision 4) (proposal reiterating prohibition on
contractor personnel supervising Federal employees found nonnegotiable because
it imposed substantive limitation). Thus, contrary to the Agency's general
assertion, and except for those sections found to conflict with the Statute or
Government-wide regulations in B.2. below, Provision 5 is within the Agency's
duty to bargain.

2. Sections Inconsistent with Statute or Government - Wide Regulations

a. Section 1.B.

We agree with the Agency's contention that including reclassification
due to a change in duties within the definition of a RIF action conflicts with
5 C.F.R. 351.201(a)(2). That section provides that reclassifications due to
erosion of duties are covered "when such action will take effect after an
agency has formally announced a reduction in force in the employee's
competitive area and when the reduction in force will take effect within 180
days." Thus, the definition in Section 1.B. is overly broad and would directly
interfere with management's right to take personnel actions in section
7106(a)(2). In these circumstances, we find that Section 1.B. is outside the
duty to bargain under section 7117(a)(1). See also FPM Letter 351-20, 2-4. at
15-18 (Mar. 4, 1986) (discussing applicability of RIF procedures when the grade
of a position is reduced).

b. First Sentence in Section 5.A.

The first sentence in Section 5.A. would provide that an employee's
additional service credit for performance be based on an employee's current
official performance appraisal. We agree with the Agency that this sentence
conflicts with regulations controlling RIF actions. The regulations require
that additional service credit be based on the employee's last three annual
performance ratings of record during the 3-year period prior to the date of
issuance of specific RIF notices. 5 C.F.R. 351.504(b) (1987). Thus, we find
that the first sentence in Section 5.A. conflicts with a Government-wide
regulation and is outside the duty to bargain under section 7117(a)(1).

c. Section 5.B.

Section 5.B. would provide that employees receive 4 years of creditable
service for an "Outstanding" rating and 2 years for "Excellent" ratings. These
years of additional credit conflict with the service credit allowed in
governing RIF regulations which provide for 20 additional years of service for
each performance rating of "Outstanding" or equivalent, 16 years for each
"Exceeds Fully Successful" or equivalent rating and 12 years for each fully
successful or equivalent rating. 5 C.F.R. 351.504 (1987). Therefore, in
agreement with the Agency, we find that Section 5.B. is outside the duty to
bargain under section 7117(a)(1) as it conflicts with a Government-wide
regulation.

d. Section 8

The first part of Section 8 would require that the Agency search for
appropriate vacancies during a RIF action and consider qualified employees who
are affected by the RIF for positions before it releases any employees. Section
8 clearly prevents the Agency from filling unit vacancies from outside FMS if
there are qualified employees available who will be laid off. Insofar as
Section 8 merely requires the Agency to search for appropriate vacancies and
consider qualified employees it would not interfere with management's rights.
See National Federation of Federal Employees Local 1332 and Headquarters, U.S.
Army Materiel Development and Readiness Command, Alexandria, Virginia, 6 FLRA
361, 365 (1981) (Proposal IV) (proposal negotiable which established area of
consideration for bargaining unit positions).

On the other hand, it would violate management's right to select to the
extent it would preclude filling vacant positions from outside the bargaining
unit if bargaining unit employees are facing separation and are qualified.
Colorado Nurses Association and Veterans Administration Medical Center, Ft.
Lyons, Colorado, 25 FLRA No. 66, slip op. at 19-20 (1987) (Proposal 5),
petition for review filed sub nom. Colorado Nurses Association v. FLRA, No.
87-1104 (D.C. Cir. Feb. 25, 1987). This restriction on management's right to
select is not altered by the qualifying language "absent just cause." The
effect of this language is simply to subject to arbitral review management's
decision to fill a vacancy from outside FMS. See National Union of Hospital and
Health Care Employees, AFL - CIO, District 1199 and Veterans Administration
Medical Center, Dayton, Ohio, 28 FLRA No. 65, slip op. at 4 (1987) (Proposal
1). Thus, Section 8 violates management's right to select which is reserved
under section 7106(a)(2)(A).

However, Section 8 is intended as an appropriate arrangement for
employees adversely affected by management's decision to conduct a RIF. In this
respect, it is to the same effect as Provision 32 found to be an appropriate
arrangement in International Plate Printers, Die Stampers and Engravers Union
of North America, AFL - CIO, Local 2 and Department of the Treasury, Bureau of
Engraving and Printing, Washington, D.C., 25 FLRA No. 9, slip op. at 28-30
(1987). Provision 32 in that case required the agency to eliminate recruitment
efforts and fill vacancies with qualified employees who were affected by the
RIF. We found that Provision 32 was a negotiable appropriate arrangement
because the agency retained discretion to determine whether the employees who
would otherwise be separated were qualified to fill the vacant positions and,
if not, to hire from outside the agency. Moreover, it is clear that FPM
Requirement 4 does not apply. See National Treasury Employees Union and
Department of Energy, 24 FLRA No. 52 (1986). Thus, based on Bureau of Engraving
and Printing and the cases cited therein, we find here that Section 8 is an
appropriate arrangement and within the duty to bargain.

e. Section 10

The intent of Section 10 is unclear. However, assuming the Union intends
that section to prevent the Agency from deciding to waive Office of Personnel
Management requirements for particular positions, it is outside the duty to
bargain as it is contrary to 5 C.F.R. 351.703. That section provides that an
agency may waive qualifications if an employee meets any minimum educational
requirements for a position and the agency determines that the employee has the
capacity, adaptability, and special skills necessary to satisfactorily perform
in the position. See also FPM Letter 351-20, 5-9 at 63 (Mar. 3, 1986).
Moreover, Section 10, read as an absolute prohibition on management's right to
determine a candidate's qualifications, clearly violates management's right to
select under section 7106(a)(2). See National Federation of Federal Employees,
Local 1450 and U.S. Department of Housing and Urban Development, 23 FLRA No. 1
(1986) (provision nonnegotiable which required agency to select employees
affected by a RIF without a management determination of requisite
qualifications if they met minimum standards for vacancies). See also National
Association of Government Employees, Local R14-87 and Department of the Army,
Kansas Army National Guard, 21 FLRA No. 105 (1986).

f. Section 12

Section 12 would permit bargaining unit employees to appeal an effected
RIF action only to the Merit Systems Protection Board (MSPB). The Statute
permits the parties to exclude RIF actions from the negotiated grievance
procedure under section 7121(a). However, under section 7121(d) an employee may
choose to appeal discrimination complaints which are part of personnel actions
appealable to MSPB through an agency's EEO complaints process. 5 C.F.R.
1201.154(c) (1987). Since Section 12 does not state this right, it is
inconsistent with Statute and therefore outside the duty to bargain under
section 7117(a)(1). See American Federation of Government Employees, AFL - CIO,
Local 1458 and U.S. Department of Justice, Office of the U.S. Attorney,
Southern District of Florida, 29 FLRA No. 1, slip op. at 20-21 (1987)
(Provision 14) (proposal omitting an applicable appeal right to EEOC held
nonnegotiable).

C. Conclusion

We hold that Sections 1.B., 5.B., 10 and 12 and the first sentence of
5.A. are outside the duty to bargain under section 7117(a)(1) of the Statute
because they conflict with statute or Government-wide regulations governing
RIFs. Additionally, we find that Section 10 is nonnegotiable because it
violates management's right to assign and select under 7106(a)(2). We also find
that while Section 8 is inconsistent with management's right to select, it is a
negotiable appropriate arrangement under section 7106(b)(3) of the Statute. In
view of the Agency's failure to specify how its rights are violated by the
remaining sections of Provision 5, we find these sections are within the duty
to bargain.

VII. Provision 6

Article 26, Section 9B:

Upon written request, the Service will provide the Union with
information as to the availability of Office of Personnel Management training
in this area. The Service agrees to nominate one (1) union representative to
attend one (1) Office of Personnel Management course in this field two (2) to
three (3) workdays during the life of this agreement without charge to annual
leave or leave without pay; provided, however, that the Union reimburse the
Service for any expenses or charges, and that the Union representative has
given the Service his/her written request at least three (3) work weeks in
advance, attendance being subject to severe workload requirements. (Only the
underscored portion is in dispute.)

A. Positions of the Parties

The Agency contends that the disputed portion of the provision conflicts
with its right under section 7106(a)(2)(B) of the Statute to assign work
because it involves a training assignment. Further, because the right to assign
work includes the right to determine who will perform it, the Agency argues
that the provision interferes with its rights by requiring that a Union
representative be trained.

The Union states that its intent is to negotiate official time under
section 7131(d) of the Statute for Union representatives to take OPM courses
concerning employee assistance programs. The Union points out that knowledge of
the employee assistance program is essential because the Union has agreed in
its collective bargaining agreement with the Agency that it will cooperate
fully with management in its attempts to rehabilitate employees who accept
assistance under employee assistance programs. Further, the Union asserts that
issues related to alcoholism and drug abuse frequently arise during Union
representation of employees against whom management has taken conduct and
performance actions.

B. Analysis

Provision 6 would require the Agency to grant a Union representative
official time to attend an OPM course about employee assistance programs.
Contrary to the Agency's assertions, the provision does not require the Agency
to provide training. In fact, it states that the Union will pay any expenses
incurred by the attendance of a Union representative at a course. Thus, the
issue is whether a Union representative's attendance at an employee assistance
program meets the requirements for negotiation of official time in section
7131(d) of the Statute, that is, whether the time is for labor-management
related representational activity.
2
National Archives and Records Administration and American Federation of
Government Employees, Council 236, Local 2928, 24 FLRA No. 29, slip op. at 3
(1986). See also AFGE, Local 2096 v. FLRA, 738 F.2d 633, 637 (4th Cir. 1984),
aff'd U.S. Naval Space Surveillance Systems, Dahlgren, Virginia and U.S. Naval
Surface Weapons Center, Dahlgren, Virginia, 12 FLRA 731 (1983).

In analyzing this issue, two factors which the Union raises are
significant. First, the parties agreed in Article 26, section 9A of their
contract as follows: "the Union agrees to cooperate fully with the Service in
its attempt to rehabilitate employees who accept assistance made available
under provisions of this program." Reply Brief, Attachment 7. As the Union
points out, knowledge of employee assistance programs is essential to meeting
this contractual obligation. Second, the question of an employee's need for
counseling or participation in employee assistance programs frequently arises
in the context of performance and conduct actions in which the Union is
representing an employee.

Therefore, we conclude that a Union representative's attendance at an
employee assistance course on official time would be a representational
activity because it would assist the Union in meeting its labor-management
responsibilities. International Plate Printers, Die Stampers and Engravers
Union of North America, AFL - CIO, Local 2 and Department of the Treasury,
Bureau of Engraving and Printing, Washington, D.C., 25 FLRA No. 9, slip op. at
25-26 (1987) (Provision 29) (provision designating bargaining unit employee to
serve on an equal employment opportunity committee held negotiable as a
procedure for carrying out statutory labor-management responsibilities);
American Federation of Government Employees, AFL - CIO, Local 3804 and Federal
Deposit Insurance Corporation, Chicago Region, Illinois, 7 FLRA 217 (1981)
(proposal held negotiable which authorized official time to union
representatives participating in activities with management officials
concerning the performance appraisal system). Compare American Federation of
Government Employees, Local 2094, AFL - CIO and Veterans Administration Medical
Center, New York, New York, 19 FLRA 1027 (1985) (Proposals 2 and 3) (proposals
nonnegotiable which granted official time to bargaining unit employees for
testing or interviews at Federal agencies and meeting with members of Congress
about job-related matters).

Section 7131(d) of the Statute specifically provides that negotiations
are appropriate for the amount of official time available to employees to
conduct representational activities. This provision creates an exception to
management's right to assign work. Military Entrance Processing Station, Los
Angeles, California and American Federation of Government Employees, Local
2866, AFL - CIO, 25 FLRA No. 57, slip op. at 4 (1987).

C. Conclusion

For the reasons and cases cited in the foregoing analysis, the provision
does not conflict with section 7106(a) (2)(B) of the Statute and is within the
duty to bargain.

VIII. Order

The Agency shall rescind its disapproval of Provision 6 and all of
Provision 5, except Sections 1.B., 5.B., 10, and 12 and the first sentence of
Section 5.A., which were bargained on and agreed to by the parties at the local
level.
3
The petition for review relating to the provision about which the Agency
withdrew its allegation of nonnegotiability and Provisions 2, 3, and 4, and
Sections 1.B., 5.B., 10, and 12 and the first sentence of 5.A. of Provision 5
is dismissed.

I. The text of the provision is set forth in Appendix A to this
decision. Only the underlined portions of the provision are in dispute.

A. Positions of the Parties

The Agency contends that this provision is nonnegotiable under section
7106(a) of the Statute because it interferes with management's right to select.
It also contends that the provision conflicts with 5 U.S.C. 2301(b)(1) and
implementing regulations in the Federal Personnel Manual (FPM). In addition,
the Agency argues that Provision 1 conflicts with an Agency-wide regulation for
which there is a compelling need.

The Union asserts that the provision is consistent with Authority
precedent as well as with 5 U.S.C. 2301(b)(1) and Government-wide regulations
cited by the Agency. In addition, the Union contends that the Agency has not
met its burden of establishing a compelling need for its regulation.

B. Analysis

1. Not Inconsistent with Management's Right to Select

Provision 1 would require that the Agency give first consideration to
Financial Management Service (FMS) employees before considering candidates from
other sources when it is making selections under section 2A of Article 13. As
the Agency recognizes in its Statement of Position, the Authority has
consistently held that proposals which require only that consideration be given
to employees within the bargaining unit in filling vacancies, but which do not
prevent management from considering other applicants or expanding the area of
consideration once bargaining unit employees have been considered, do not
interfere with management's right to select from any appropriate source.
Association of Civilian Technicians, New York State Council and State of New
York. Division of Military and Naval Affairs, Albany, New York, 11 FLRA 475,
477 (1983) (Proposal 1); Association of Civilian Technicians, Inc.,
Pennsylvania State Council and Adjutant General, Department of Military
Affairs, Pennsylvania, 4 FLRA 77 (1980).

The Agency argues that the use of the word "first" before consideration
is more restrictive as applications from bargaining unit employees must be
considered and rejected before consideration is given to other applicants. We
do not believe this factor creates a substantive limitation on management's
rights because nothing in the provision would prevent the immediate
consideration of outside applicants if the selecting official chose not to
select a bargaining unit employee. Therefore, we conclude that the provision
only establishes a procedure for management to follow in exercising its right
to select. The Authority has long held that procedures which do not prevent
management from acting at all are negotiable under section 7106(b) of the
Statute. American Federation of Government Employees, AFL - CIO, Local 1999 and
Army-Air Force Exchange Service, Dix - McGuire Exchange, Fort Dix, New Jersey,
2 FLRA 153 (1979), enforced sub nom. Department of Defense v. FLRA,659 F.2d
1140 (D.C. Cir. 1981), cert. denied sub nom. AFGE v. FLRA, 445 U.S. 945 (1982).

2. Not Inconsistent with Statute

The Agency argues that Provision 1 violates merit systems principles
established in Chapter 23 of the Civil Service Reform Act. Specifically, the
Agency asserts that the provision violates 5 U.S.C. 230l by giving preference
to bargaining unit employees because of their employment with FMS. The Agency
notes that the statute provides that "selection and advancement should be
determined solely on the basis of relative ability, knowledge, and skills,
after fair and open competition which assures that all receive equal
opportunity." 5 U.S.C. 2301(b)(1).

Provision 1, in our view, does not establish FMS employment as a
criteria for selection. Rather, it simply requires that the initial area of
consideration will be bargaining unit employees. Nothing in the Provision
limits the area of consideration; management may immediately expand the area if
it chooses not to select an FMS employee. We note that the FPM does not limit
an agency's discretion to establish the area of consideration. The regulation
requires only that "(a)reas of consideration must be sufficiently broad to
ensure the availability of high quality candidates(.)" FPM chapter 335,
subchapter 1-4, Requirement 2 (May 7, 1981). Management, therefore, has total
discretion to expand the area of consideration beyond FMS. In fact, the union
emphasizes that the Agency may select a non-unit candidate, stating only that
"before this is done Service employees must first be considered--a qualified
in-house candidate need not be selected." Reply Brief at 2. Finally, nothing in
Provision 1 requires that a selection be made on the basis of anything
other than job-related criteria. In these circumstances, we conclude that
Provision 1 is not inconsistent with statute or implementing regulations.

3. No Compelling Need Exists for the Agency's Regulation

The Agency asserts that Provision 1 conflicts with a Treasury
regulation, TPMM chapter 335, II.3.b.,
4
for which there is a compelling need. That regulation requires Treasury bureaus
to accept and consider the applications of current employees of other bureaus.
The Agency argues its regulation implements the requirement for a broad area of
consideration in the Federal Personnel Manual which is based on merit system
principles. Further, the Agency argues that there is a compelling need for the
regulation because it enables the Agency to meet its mandate to provide equal
employment opportunities as required by 5 C.F.R. 300.103(c) and 29 C.F.R. Part
1613.
5

The Authority has held that an agency's regulation can bar negotiations
on a conflicting Union proposal only if a compelling need exists for that
regulation under section 7117(a)(2) of the Statute and section 2424.11 of its
Regulations. In American Federation of Government Employees, AFL - CIO, Local
3804 and Federal Deposit Insurance Corporation, Madison Region, 21 FLRA No.
104, slip op. at 11 (1986) (Proposal 7), the Authority stated that in order to
show a compelling need for an agency regulation, an agency must: (1) identify a
specific agency-wide regulation; (2) show that there is a conflict between its
regulation and the proposal; and (3) demonstrate that its regulation is
supported by a compelling need.

In this case, the Agency has not established that TPMM chapter 335,
II.3.b. conflicts with Provision 1. As discussed above, Provision 1 would not
preclude the Agency from accepting and considering the applications of current
employees in all the Agency's bureaus or otherwise limit the Agency's
discretion to select from any other appropriate source. Furthermore, there is
nothing in the provision that requires the Agency to act in any manner
inconsistent with its equal employment opportunity mandate. Finally, even
assuming the Treasury regulation conflicted with Provision 1, the Agency has
not established that the regulation implements its equal employment opportunity
obligations. In these circumstances, we find the Agency's regulation is not a
bar to negotiations on Provision 1.

C. Conclusion

Based on the reasons and cases cited in the foregoing analysis, we
conclude that Provision 1 does not conflict with management's rights under
section 7106(a)(2)(C) of the Statute, nor is it inconsistent with law or
Agency-wide regulations. Therefore, Provision 1 is within the duty to bargain.

II. Order

The Agency shall rescind its disapproval of Provision 1 which was
bargained on and agreed to at the local level.
6

Issued, Washington, D.C., September 30, 1987.

Henry B Frazier III, Member

Jean McKee, Member

FEDERAL LABOR RELATIONS AUTHORITY

Concurring opinion of Chairman Calhoun on Provision 1

Provision 1 would require that the Agency give first consideration to
Financial management Service (FMS) employees before considering candidates from
other sources when it is making selections under section 2A of article 13. My
colleagues conclude that the provision is negotiable as a procedure under
section 7106(b)(2) of the Statute. I agree. Further, in my view the provision
is different from ones which I previously found to be nonnegotiable.

In National Treasury Employees Union and Department of the Treasury, 24
FLRA No. 54 (1986), petition for review filed sub nom. Department of the
Treasury v. FLRA, No. 87-1084 (D.C. Cir. Feb. 13, 1987), the provision in
dispute stated that if a unit employee was not selected, other employees could
not be submitted to the selecting official for 10 days. In my opinion in that
case, I concluded that the provision was nonnegotiable because it violated the
agency's right to select. As I interpreted the provision, if the agency
determined that it was necessary to fill a position in fewer than 10 days, the
provision would require the agency to either (1) select a unit employee, in
violation of its right to select; or (2) wait 10 days to make a selection,
which would be inconsistent with its determination that its mission required an
immediate selection.

Subsequently, in National Treasury Employees Union and Department of the
Treasury, Bureau of Alcohol, Tobacco and Firearms, 26 FLRA No. 60 (1987),
petition for review filed sub nom. Department of the Treasury, Bureau of
Alcohol, Tobacco and Firearms v. FLRA, No. 87-1234 (D.C. Cir. May 29, 1987), I
reached the same conclusion concerning a proposal which prevented the agency
from soliciting, ranking, or considering applications from outsiders until
bargaining unit employees had been considered. I stated that while first
consideration, standing alone, would be a negotiable procedure, a proposal such
as the one in that case would directly interfere with the agency's right to
make selections because, in my view, that right includes the right to select
immediately if necessary for the efficient functioning of the agency.

There is nothing in the record of this case to show that Provision 1
would prevent the agency from immediately considering outside applicants if it
did not select a unit employee after first consideration. The Union emphasizes
that the agency could select a non-unit candidate, stating only that "before
this is done, Service employees must first be considered--a qualified in-house
candidate need not be selected." Union Response at 2. Therefore, consistent
with my opinion in Bureau of Alcohol, Tobacco and Firearms, I conclude that
Provision 1 constitutes a negotiable procedure under section 7106(b)(2) of the
Statute. Accordingly, I concur in the result reached by my colleagues.

The service reserves the right to make a selection from any appropriate
source. However, the Service agrees that all covered actions as specified in
Section 2(A) of this Article will be announced among Service employees in
accordance with Section 4 of this Article and that first consideration for
selection will be given to Service employee, prior to considering other than
Service employees.

Article 13, Section 10 B. 1. a.

The Best Qualified candidates (those referred to the Selecting Official)
will be determined as follows:

First Consideration:

If the evaluation process produces 3 to 5 Highly Qualified candidates
from within the service, those candidates will be certified to the Selecting
Official in alphabetical order on a Ranking and Selection Report for first
consideration.

Provision 2

Article 13, Section 8 B.:

Merit Staffing Panels act in an advisory capacity to the Selecting
Official. Panels will be selected by the Service from all levels of the
workforce and will consist of at least three (3) voting members (one of whom
must be a subject matter expert) and a fourth, non-voting member from the
servicing Personnel Office.

Such panel members will not normally be from the same organizational
segment supervised by the selecting official, unless this would preclude the
Service appointing to the Panel a qualified subject matter expert from within
the Service.

The service agrees to continue its policy of seeking to establish merit
Staffing Panel composition that includes minority group members, non-minority
group members, women and men as appropriate. No Union officer or steward shall
be a member of any Merit Staffing Panel. Voting Panel members must be at least
the same grade level as the position to be filled.

Provision 4

Article 15, Section 5

A. 1. There will be five (5) performance levels for rating purposes.
These will be outstanding, excellent, fully successful, marginal, and
unsatisfactory (see Section 8).

2. Standards for elements will be established at the excellent, fully
successful, and marginal levels.

B. Performance on each element will be rated as outstanding, excellent,
fully successful, marginal or unsatisfactory.

1. If the Service defines a critical element as consisting or more than
one (1) act or task, then in arriving at the performance rating for the element
due consideration will be given to the level of performance on all acts or
tasks within the element.

2. In arriving at the performance rating for an element, due
consideration will be given the level of performance on all criteria that
combine to constitute the standard.

C. Total performance will be given overall summary rating of
outstanding, excellent, fully successful, marginal, or unsatisfactory as
defined in Section 8.

Article 15, Section 8 E.:

E. At the conclusion of the annual appraisal period, the rating official
will prepare the annual appraisal of performance. A written assessment
will be prepared describing the employee's performance against the elements and
standards. The rating official will assign one of the performance rating levels
defined for each critical and non-critical element included in the employee's
performance plan:

Outstanding: That level of performance that FAR EXCEEDS the requirements
of acceptability in a demonstrable way. It is that level of performance which
exceeds the excellent standard.

Excellent: That level of performance that SIGNIFICANTLY EXCEEDS the
requirements of acceptability in a demonstrable way. It is that level of
performance which exceeds the fully successful standard.

Fully Successful: That level of performance that is at the ACCEPTABLE
LEVEL OF COMPETENCE. It is that level of performance which fully and completely
accomplishes the work.

Marginal: That level of performance that NEEDS IMPROVEMENT and is NOT an
acceptable level of competence. Marginal performance in one or more critical
elements will be the basis for withholding the employee's within-grade
increase.

Unsuccessful: That level of performance in which work falls below the
marginal standard. Unsuccessful performance in one or more critical elements
will be the basis for withholding the employee's within-grade increase and may
be the basis for reassigning, reducing in grade, or removing the employee.

Provision 5

Article 16: Reduction-In-Force

Section 1 General Information

A. The Parties agree that reduction-in-force (RIF) actions affecting
unit employees will be conducted in accordance with law, regulation, current
Office of Personnel Management (OPM), Departmental, and Service policies and
procedures, and the provisions of this Article.

B. For purposes of this Article, reduction-in-force is defined as the
release of an employee from his/her competitive level by separation, demotion,
furlough for more than thirty (30) calendar days, or reassignment requiring
displacement when lack of work or funds, reorganization, reclassification due
to a change of duties, or the need to make a place for a person exercising
re-employment or restoration rights requires the Service to release an
employee.

Section 2 Notice

A. The Service agrees to provide the Union with notification of a
potential reduction-in-force as far in advance as possible before the issuance
of the first notice to employees.

B. The notice to the Union will include at least:

1. The anticipated date of the RIF.

2. The numbers and names of potentially affected employees by position
and grade levels.

3. The specific reasons for the RIF.

4. Any available statistics on the Service's anticipated attrition rate
in the affected area prior to the effectuation of the RIF actions.

C. The Union will also be provided with updated information concerning
RIF actions as soon as such information becomes available including, but not
limited to, additional positions affected, the names of affected employees,
revised dates, listings of job offers made, etc.

D. The Service will consider and pursue alternatives in an effort to
avoid the need to release any bargaining unit employee from his/her competitive
level.

E. Upon receipt of written notice from the Service of a potential
reduction-in-force, the Union will notify the Service in writing of its
intention to request to negotiate on the impact and implementation of the RIF.
Such notice and negotiations will be conducted in accordance with the
timeframes and procedures contained in Article 5, Labor Management Negotiating
Procedures.

Section 3 Competitive Areas

A. As determined by the Service for purposes of reduction-in-force, the
Headquarters and each Financial Center are separate and complete competitive
areas.

B. The Service reserves the right to change or modify the above
designated competitive areas due to organizational changes or needs. In the
event the Service changes the competitive areas designated above, the Union
will be notified and provided the reasons for such changes in accordance with
the provisions of Article 5, Labor Management Negotiating Procedures.

Section 4 Competitive Levels

A. Competitive levels will be determined by the service in accordance
with law, regulation, and OPM, Departmental and service policies and
procedures.

B. The Service will take no RIF action until every affected position in
the area is assigned to a competitive level.

C. For purposes of determining competitive levels, undue interruption is
defined as a degree of interruption that would prevent the completion of the
required work within the allowable limits of time and quality. Depending upon
the priorities, deadlines, and other demands at the time of the creation of the
competitive level, the ordinary work program would not be unduly interrupted if
the optimum quantity and quality of work were regained within ninety (90) days
after the reduction-in-force.

D. The Union will be provided an opportunity to review an unsanitized
copy of the retention register for those competitive levels affected by
the reduction-in-force within five (5) workdays prior to the issuance of the
general notice of a RIF to affected employee(s) and when the notice is issued.

Section 5 Length of Service/Credit for Performance

A. Employee's current official performance appraisal of record as of the
date of issuance of a specific notice is the appraisal that will be used in
determining his/her retention standing. Performance appraisals that were due on
or before the issuance of the specific notice, but were not officially approved
and put on record, will be approved and put on record before the issuance of
the specific notice. When completed this appraisal must be included in the
employee's OPF at least two (2) workdays prior to the issuance of the specific
notice. However, in no event may an appraisal delay the issuance of a specific
notice.

B. Additional service will be credited based on an employee's
performance appraisal of record in accordance with OPM, Departmental, and
Service rules and regulations. Employees with a current rating of outstanding
will receive an additional four (4) years of creditable service. Employees with
an excellent rating will receive an additional two (2) years of service.

Section 6 Records

A. The Service will maintain all records at least two (2) years for
career employees and one (1) year for career conditional employees. If an
employee alleges discrimination in his/her RIF appeal the records will be
maintained for the period of the appeal plus one (1) year.

B. Each affected employee and/or his/her union representative shall have
the right to inspect retention records and other records. His/her
representative is entitled to use Chapter Bank time as provided in Article 9,
Section 5, of Union Rights and Representation.

Section 7 Notice to Employees

Affected employees will receive notice 30 calendar days prior to the
effective date of the RIF. Two (2) copies of the specific RIF notice will be
given to each employee. The specific notice to employees will state the
following information:

1. The action to be taken and the effective date;

2. competitive area;

3. competitive level;

4. group and subgroup;

5. service computation date;

6. information explaining how and where the employee may examine
retention registers and other records;

7. appeal rights; and

8. where to apply for the Displaced Employees Program.

The notice will also include any other applicable information such as
retirement, severance pay, grade and pay retention, and outplacement programs.

Section 8 Existing Vacancies

A. To minimize the adverse effect of RIF on employees, the Service will
search within the competitive area for appropriate vacancies. The service will
consider affected qualified employees for vacant positions before releasing any
employee. Unit vacancies will not be filled from outside the Service, absent
just cause, if employees facing separation are qualified and available for such
vacancies. In the event that an employee has any question as to his/her right
to an available position, or to his/her right of consideration for a
vacancy, that employee may request an explanation from the servicing Personnel
Office.

Section 9 Retention/Reassignment

A. Where an affected employee is given a job offer, he/she will be given
a reasonable amount of time to respond. Under no circumstances will the
response time be more than one (1) week for an in-town position and three (3)
weeks for a relocation position. For good cause shown the employee may receive
more time to respond.

Section 10 Waiver

No service waivers of qualifications will be granted in any
circumstances.

Section 11 Retirement

When the Service identifies positions that will be RIF'ed, it will
follow the OPM regulations and criteria for requesting early-out retirement.

Section 12 Appeal

Bargaining unit employees may only appeal an effected RIF action to the
Merit Systems Protection Board.

2/ Section 7131(d) provides: Except as provided in the preceding
subsections of this section--

(1) any employee representing an exclusive representative, or

(2) in connection with any other matter covered by this chapter, any
employee in an appropriate unit represented by an exclusive representative,
shall be granted official time in any amount the agency and the exclusive
representative involved agree to be reasonable, necessary, and in the public
interest.

4/ TPMM, chapter 335, subsection II. 3.b. provides in relevant part:

Except for their CADE (upward mobility) programs, all bureaus must
accept and consider the voluntary application of any current employee of any
other Treasury bureau . . . who makes specific application.

5/ 5 C.F.R. 300.103(c) provides that:

An employment practice shall not discriminate on the basis of race,
color, religion, sex, age, national origin, partisan political affiliation, or
other non-merit factor.

29 C.F.R. 1613.202 provides, in relevant part:

It is the policy of the Government of the United States and the
government of the District of Columbia to provide equal opportunity in
employment for all persons . . . (.)